Defence Committee Oral Evidence: Defending Global Britain in a Competitive Age, HC 1333
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Defence Committee Oral evidence: Defending global Britain in a competitive age, HC 1333 Tuesday 20 April 2021 Ordered by the House of Commons to be published on 20 April 2021. Watch the meeting Members present: Mr Tobias Ellwood (Chair); Stuart Anderson; Sarah Atherton; Richard Drax; Mr Mark Francois; Mr Kevan Jones; Mrs Emma Lewell-Buck; Gavin Robinson; John Spellar; Derek Twigg. Questions 128 - 166 Witnesses I: Professor John Louth, Independent Author and Defence Analyst; Paul Hough, Defence Business Consultant. Examination of Witnesses Witnesses: Professor John Louth and Paul Hough. Chair: Welcome to this Defence Committee hearing on Tuesday 20 April 2021. This is a one-off session to consider the defence and security industrial strategy and the integrated review. The purpose of this session is to have a preliminary discussion on the defence and security industrial strategy—DSIS for short—and to seek experts’ first reactions to the strategy and how it fits into the integrated review and the defence command White Paper, which were both published recently. We are very pleased to welcome two witnesses today: Professor John Louth, who is an independent author and defence analyst, formerly of RUSI; and Paul Hough, who is a defence business consultant, formerly of BAE Systems, General Dynamics and Rheinmetall. Welcome to you both. We are very pleased to have you this afternoon and we look forward to exploring these issues. Three papers have just been produced, and it is the industrial strategy that we are focusing on today. Q128 Stuart Anderson: Hello and welcome to both of you. If we take the defence command paper and DSIS, ADS has described it as “a very positive step”. Do you agree with this? If not, what are your views on it? Professor Louth: Thank you to the Committee for inviting me. I share ADS’s view. I thought this was a strong paper. You could see an author’s hand in it rather than a piece or pieces of staff work. The argument made throughout DSIS was cognisant of the critiques and challenges that had been presented by analysts and thinkers over the preceding 10 years, so I was encouraged to read it. Paul Hough: I agree with John and with ADS. This is perhaps a turning of the corner and it recognises that the approach that has been prevalent over perhaps even the last 30 years may have become a blunt instrument. As the paper says, they now need to take a more nuanced approach to the market, to procurement and to delivering capabilities. It was a surprisingly positive step and one that is very welcome. Q129 Stuart Anderson: When you say “surprisingly positive”, were you not expecting it to go in this direction? Paul Hough: I say it is surprising because, if I were to write a wish list of things that could have been in the paper, it would tick most, if not all, of the boxes. You are always surprised when you get what you were hoping for. Q130 Stuart Anderson: You say it ticked most, if not all, of your wish list. Is there anything else you would have liked to have seen in it? Paul Hough: No, not really. As with anything, though, the challenge will come in the implementation, and the devil is in the detail, but it is the start of a journey and of procurement moving in a different direction. We can quibble with some of the wording and ask questions, but I share what John and ADS said. It was an excellent document. Q131 Chair: Just to pursue that a bit further and get us going, you welcome this, and the words you use almost suggest that you are mildly surprised. Perhaps the bar was set quite low. Could I tease out of you how you thought the industrial strategy has fared over the last 10 to 15 years? How have the Government and MoD specifically done? How would you rate them? How is this going to then move us forward? Professor Louth: Since SDR 1998, industrial strategy and acquisition have been two sides of the same coin. We have not really differentiated between the two. Indeed, it is tricky to do so. Looking historically, SDR 1998 really focused on structures, processes and values, and everything to do with smart acquisition derived from that. Lots of new headquarters were being built and significant sums of money were being spent. The defence and security industrial strategy 2005 really added sectorial champions to the equation, but perhaps without the clear-eyed funding to support that approach. When you get to the Levene reforms post 2010, we are back to structures and competency reform, which was added to by Peter Luff’s White Paper in 2012, where we were really talking about commercial, off-the-shelf competition being the principal driver for efficiency and a modest though hard-won commitment to financing science and technology. Since 1998, it is everybody on the bus and everybody off the bus being driven by the change management professions, in many ways. Given that background, people were a little surprised to end up with a coherent, well-written document that seemed to be reflective of some of the critiques, issues, risks and debates that have been happening over those 10 years. People, perhaps in their more cynical moments, were thinking that it would be yet another “motherhood and apple pie” paper. It was not that. It was a coherent document. One of the smart questions worth exploring is how it fits into the other two documents. Are the triptych of documents coherent across themselves? Do they make sense as a hierarchy and as a set of emerging strategies? That is something that people will really be exploring over the immediate feature. Paul Hough: I agree with John. I have worked in the defence industry for quite a long time. Since the 1980s and the original Levene reforms, we have been on a published path of competition. As John said, the defence industrial strategy and acquisition are, effectively, two sides of the same coin and there has not been a link between previous defence industrial strategies and acquisition or procurement. We have had an emerging strategy in combat air. We have had the national shipbuilding strategy. We have good examples like Team Complex Weapons. Principally, the procurement has been following a competitive role and has been out of step with any defence industrial strategy. This documents brings the two together and says that procurement will be used to implement the defence industrial strategy, which is a very positive step. Q132 Derek Twigg: I would like to explore further how the DSIS fits with the priorities set out in the integrated review. Also, what role could the defence industry play in realising the Government’s ambition for the UK to become a scientific superpower? Professor Louth: That is a very interesting set of questions. Taking the latter one first, I am not sure what an international scientific superpower is at the moment. When we think of 21st-century technologies and the science behind them, we have to accept that they are almost international by their nature. Science and technology flow in a very capillary manner over, across and between borders. Even if we look at something that is very close to our hearts at the moment—the vaccine programmes—it is very difficult to think of them in a national setting rather than with their international supply chains and the international knowledge collaboration. We have to be very clear-eyed when we talk about nations as scientific superpowers. Nations, and possibly even alliances, can exploit technologies and science better than others, perhaps, and one of the things we are hoping for is that the West can exploit technologies better than its current and emergent rivals. To put a national lens on that misunderstands the way that technologies work and the way that scientists and technologists inform themselves and each other in the 21st century. It is going to be very difficult to think of it just through a national lens. I would caution folk not to do that. If they do, they really misunderstand the literature on how technology and science flow, but perhaps that is something to be considered more deeply. In terms of your first question, I am a little unsure as to how the hierarchy of plans, if I can use that phrase, works and comes together. The command paper and the integrated review felt as if it was staff documentation and as if a lot of Departments had been involved, and perfectly understandably. It felt like it had been much more staffed than authored, whereas the industrial strategy clearly had fewer people contributing to it. There may have been discussions, but it was, at least to my mind, authored by a much tighter group. You could sense that in the reading. Over the past couple of weeks, I have tried to map across the themes from the three documents and it is not a particularly easy exercise, so I am really looking forward to more engagement with the Department and with other colleagues on just how DSIS supports our broader intent within the integrated review. Paul Hough: If I could just add another view, I bow to John’s experience and knowledge in terms of the connection between the three papers. I suggest that the DSIS could have been written independently of the other two papers, because it is focused on the defence and security industries and the acquisition of systems and products in that area, and is very much a servant of what the defence command paper will try to do.